Punching above its weight
Transcription
Punching above its weight
Public Transportation│Singapore November 13, 2014 3QFY14 RESULTS NOTE ComfortDelGro CD SP / CMDG.SI Market Cap Avg Daily Turnover Free Float US$4,345m US$9.63m 59.0% S$5,604m S$12.25m 2,086 m shares Current S$2.62 Target S$3.11 Prev. Target Up/Downside S$2.88 18.7% Conviction| | Punching above its weight CIMB Analyst(s) ————————————————————————————————————————— Gary NG T (65) 6210 8699 E [email protected] CD’s 3Q14 and 9M14 results were slightly ahead of our expectations, with net profits meeting 29% and 79%, respectively, of our FY14 forecast due to lower minority interest leakages. We increase our FY14 EPS by 4% to reflect that, and raise our DCF-based target price (6.5% WACC) in anticipation of better earnings visibility beyond FY16. Catalysts include reduced capex and overall improvements in CD’s cashflow profile and balance sheet allowing it to boost its overseas growth to support progressively higher dividends. Reiterate Add. Domestic operations progressing well Share price info Share price perf. (%) 1M 3M 12M Relative 2.9 2.2 33.9 Absolute 6.1 2.3 Major shareholders 38.3 % held Blackrock Capital Group Silchester Int'l Investors 6.7 6.4 4.9 Show Style "View Doc Map" CD’s 3Q14 revenue rose by 6% yoy on broad-based growth. Overseas business accounted for 40.3% of the group’s revenue and 46.4% of its operating profit. This suggests that domestic operations are improving. CD’s operating costs rose, mainly due to higher energy, repair and maintenance, and staff costs, as well as the FX effect. The group's 3Q14 EBIT margin was largely unchanged at 11.9%. The rail segment posted an EBIT increase, but it was not reflective of its NEL line’s improvements due to DTL 1’s operating losses. Management hinted at a mid-2016 timeframe for DTL 1 to break even, once DTL 2 commences operations. Otherwise, Singapore Bus is loss-making, if not for the advertising income attached to SBS-Transit. Looking beyond results The UK operations were the main reasons for the spike in fuel costs (related to fuel duty). Fuel hedging in Singapore has largely been taken care of, with 70% of the fuel hedged for FY15 at a lower rate than in FY14. CD has also taken advantage of the current lower fuel prices by hedging some of its FY16’s needs. The Australia Region 4 bus routes are expected to step up in contribution over time, while the group looks to revamp and update its own taxis’ booking apps to stem leakages in taxi booking fees. Assets disposal angle could unlock more value The CIMB Stock Selection Tools (SST) are designed to complement and enhance the investment decision making process. The SST incorporate a range of analytical tools, providing ready access to key company and market data, valuation tools and charts. If you are interested in subscribing to the 'Stock Selection Tools', please contact your CIMB account manager. Our DCF-based target price is pushed up largely due to the improving cashflow CD is enjoying. Overseas ventures yield higher profit margins and this will, over time, be a proportionately bigger contributor to the group. Funding for such acquisitions is not an issue given CD’s balance sheet. Our forecast excludes the c.S$1bn (or c.S$0.47/share) worth of bus asset disposals/transfers under the eventual cost-plus bus contracting model. Results Comparison FYE Dec (S$ m) Revenue Operating costs EBITDA EBITDA margin (%) Depn & amort. EBIT Interest expense Interest & invt inc Associates' contrib Pretax profit Tax Tax rate (%) Minority interests Net profit EPS (S cts) Core EPS (cts) 3Q FY14 1,037.3 (823.5) 213.8 20.6 (89.9) 123.9 (5.6) 3.9 0.3 122.5 (25.1) 20.5 (16.6) 80.8 3.8 3.8 3Q FY13 978.4 (771.7) 206.7 21.1 (84.3) 122.4 (7.0) 4.1 0.2 119.7 (24.8) 20.7 (18.2) 76.7 3.6 3.6 yoy % chg 6.0 6.7 3.4 6.6 1.2 (20.0) (4.9) 50.0 2.3 1.2 (8.8) 5.3 4.7 12.2 qoq % 3QFY14 3QFY13 chg cum cum 2.1 3,004.4 2,757.6 1.9 (2,396.5) (2,175.5) 2.9 607.9 582.1 20.2 21.1 2.3 (262.6) (251.2) 3.3 345.3 330.9 (5.1) (17.4) (21.1) 56.0 9.0 8.9 2.1 2.0 4.7 339.0 320.7 (0.8) (72.5) (68.5) 21.4 21.4 3.8 (46.7) (48.9) 6.7 219.8 203.3 7.1 10.3 9.6 7.1 10.3 9.6 yoy % Prev. Comments chg FY14F 8.9 3,909.9 In line, 40.3% of revenue from overseas in 3Q14 10.2 (3,092.7) Higher staff costs, fuel costs (fuel duty in UK bus) 4.4 817.2 In line, 3Q14 EBITDA 26% to our FY14 est. 20.9 Margins were stable and in line with expectations 4.5 (342.3) Newer bus fleet & COE for taxis replacement 4.4 474.9 Overseas ops 46.4% of EBIT in 3Q14 (17.5) (40.4) UK/Ireland contributed 42.3% to overseas EBIT 1.1 7.8 Outperforming returns 5.0 7.8 Muted contributions from associates 5.7 450.1 In line with our forecasts 5.8 (94.5) 21.0 (4.5) (78.2) Lesser M.I leakages resulted in results beat 8.1 277.4 PATMI +5.3% yoy in 3Q14 and 8.1% in 9M14 7.2 13.1 3Q14 met 29% of our FY14 est. 7.2 13.1 9M14 met 79% of our FY14 est. SOURCE: CIMB, COMPANY REPORTS IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. Designed by Eight, Powered by EFA ComfortDelGro│Singapore November 13, 2014 Price Close Financial Summary Relative to FSSTI (RHS) 2.80 2.60 134.0 2.40 124.0 2.20 114.0 2.00 104.0 1.80 20 94.0 15 Vol m 10 5 Nov-13 Feb-14 May-14 Aug-14 Source: Bloomberg 52-week share price range 2.62 2.70 1.89 3.11 Current Target Revenue (S$m) Operating EBITDA (S$m) Net Profit (S$m) Core EPS (S$) Core EPS Growth FD Core P/E (x) DPS (S$) Dividend Yield EV/EBITDA (x) P/FCFE (x) Net Gearing P/BV (x) ROE % Change In Core EPS Estimates CIMB/consensus EPS (x) Dec-12A 3,545 735.3 248.9 0.12 5.65% 21.95 0.065 2.46% 8.29 23.45 0.3% 2.72 12.8% Dec-13A 3,748 763.7 263.2 0.13 5.75% 20.76 0.071 2.72% 7.96 21.16 (0.8%) 2.54 12.6% Dec-14F 3,910 817.2 289.1 0.14 9.85% 18.90 0.078 2.99% 7.45 26.58 (2.2%) 2.40 13.0% 4.23% 1.05 Dec-15F 4,024 853.2 296.5 0.14 2.56% 18.43 0.080 3.07% 7.03 16.18 (7.4%) 2.27 12.6% 0.00% 1.01 Dec-16F 4,190 884.2 314.8 0.15 6.17% 17.36 0.085 3.26% 6.50 10.96 (16.3%) 2.15 12.7% 0.00% 0.99 SOURCE: CIMB, COMPANY REPORTS Figure 1: Segmental performance Revenue FYE Dec (S$'m) 3Q14 Bus 527.5 Rail 51.0 Taxi 327.1 Auto Eng / diesel sales 77.4 Others 54.3 Total 1,037.3 3Q13 yoy Chg 2Q14 qoq Chg Comments 502.6 5% 516.5 2% S'pore +3.1%, UK up through Metroline and FX; Australia down 42.0 21% 48.8 5% Ridership increase: NEL +7.1% yoy; LRTs +9.5%, DTL avg ridership 68K 303.1 8% 320.1 2% Broad base growth except Australia. Strong demand in S'pore & UK 78.0 -1% 77.7 0% Higher vehicle maintenance and servicing 52.7 3% 53.2 2% 978.4 6% 1,016.3 2% Overseas business 40.3% of group revenue in 3Q14 EBIT FYE Dec (S$'m) Bus Rail Taxi Auto Eng / diesel sales Others Total 3Q14 45.4 2.2 43.0 16.1 17.2 123.9 3Q13 yoy Chg 51.0 -11% 0.0 NA 42.1 2% 13.1 23% 16.2 6% 122.4 1% EBIT Margin FYE Dec (%) Bus Rail Taxi Auto Eng / diesel sales Others Total 3Q14 8.6% 4.3% 13.1% 20.8% 31.7% 11.9% 3Q13 yoy Chg 10.1% -1.5% 0.0% 4.3% 13.9% -0.7% 16.8% 4.0% 30.7% 0.9% 12.5% -0.6% 2Q14 qoq Chg 48.1 -6% Overseas bus business accounted for 86.8% of bus EBIT 2.5 -12% DTL1 still losing money despite rise in ridership, breakeven likely mid-16 41.2 4% Overseas taxi business accounted for 33.5% of taxi operating profit 11.4 41% 16.7 3% 119.9 3% Overseas business 46.4% of group EBIT in 3Q14 2Q14 qoq Chg 9.3% -0.7% 5.1% -0.8% 12.9% 0.3% 14.7% 6.1% Combination of volume and diesel prices resulted in better margins 31.4% 0.3% 11.8% 0.1% SOURCES: CIMB, COMPANY REPORTS Figure 2: Revenue guidance – largely positive tone SOURCE: CIMB RESEARCH, COMPANY 2 ComfortDelGro│Singapore November 13, 2014 Figure 3: Overseas contribution was 40.3% of group revenue and 46.4% of EBIT in 3Q14 SOURCE: CIMB RESEARCH, COMPANY Figure 4: Peers Comparison Recom. Price (lcl curr) Target Price (lcl curr) Market Cap (US$ m) CD SP MRT SP Add Add 2.62 1.59 3.11 1.82 4,345 1,871 18.9 30.5 24.7 Thailand BTS Group Simple average BTS TB Add 10.50 11.00 3,780 Indonesia Express Transindo Utama Tbk PT Simple average TAXI IJ NR 1,135 NA 66 HK NR 31.10 NA Bloomberg Ticker Singapore ComfortDelGro SMRT Corporation Simple average Company Hong Kong MTR Corp Ltd Simple average Simpler average (all co) 3-year EPS CAGR (%) P/BV (x) CY2014 Recurring ROE (%) CY2014 Dividend Yield (%) CY2014 18.4 26.2 22.3 5.1% 19.8% 12.4% 2.40 2.87 2.63 13.2% 9.7% 11.5% 3.0% 1.4% 2.2% 54.9 54.9 49.0 49.0 13.7% 13.7% 2.19 2.19 4.1% 4.1% 5.9% 5.9% 200 16.7 16.7 14.0 14.0 19.7% 19.7% 2.69 2.69 15.7% 15.7% 1.1% 1.1% 23,353 17.4 17.4 16.1 16.1 -5.9% -5.9% 1.14 1.14 6.9% 6.9% 3.1% 3.1% 28.4 25.3 10.0% 2.16 9.5% 3.1% Core P/E (x) CY2014 CY2015 SOURCES: CIMB, COMPANY REPORTS, BLOOMBERG 3 ComfortDelGro│Singapore November 13, 2014 Balance Sheet Profit & Loss (S$m) Total Net Revenues Gross Profit Operating EBITDA Depreciation And Amortisation Operating EBIT Financial Income/(Expense) Pretax Income/(Loss) from Assoc. Non-Operating Income/(Expense) Profit Before Tax (pre-EI) Exceptional Items Pre-tax Profit Taxation Exceptional Income - post-tax Profit After Tax Minority Interests Preferred Dividends FX Gain/(Loss) - post tax Other Adjustments - post-tax Net Profit Recurring Net Profit Fully Diluted Recurring Net Profit Dec-13A 3,748 1,091 764 (337) 426 (16) 4 0 414 0 414 (87) Dec-14F 3,910 1,162 817 (342) 475 (33) 8 0 450 0 450 (95) Dec-15F 4,024 1,206 853 (352) 502 (32) 8 0 477 0 477 (100) Dec-16F 4,190 1,261 884 (356) 528 (32) 8 0 505 0 505 (106) 327 (64) 0 356 (66) 0 377 (80) 0 399 (84) 0 263 263 263 289 289 289 297 297 297 315 315 315 (S$m) Total Cash And Equivalents Total Debtors Inventories Total Other Current Assets Total Current Assets Fixed Assets Total Investments Intangible Assets Total Other Non-Current Assets Total Non-current Assets Short-term Debt Current Portion of Long-Term Debt Total Creditors Other Current Liabilities Total Current Liabilities Total Long-term Debt Hybrid Debt - Debt Component Total Other Non-Current Liabilities Total Non-current Liabilities Total Provisions Total Liabilities Shareholders' Equity Minority Interests Total Equity Cash Flow Dec-14F 873 339 78 5 1,295 2,865 78 687 310 3,941 218 Dec-15F 1,043 343 80 5 1,471 2,913 86 687 310 3,997 218 Dec-16F 1,363 348 84 5 1,800 2,828 95 687 310 3,919 218 665 179 1,063 590 586 217 1,022 590 604 222 1,044 590 629 228 1,075 590 146 735 493 2,290 2,155 640 2,795 146 735 493 2,249 2,280 706 2,987 146 735 493 2,272 2,409 787 3,196 146 735 493 2,303 2,546 871 3,417 Key Ratios (S$m) EBITDA Cash Flow from Invt. & Assoc. Change In Working Capital (Incr)/Decr in Total Provisions Other Non-Cash (Income)/Expense Other Operating Cashflow Net Interest (Paid)/Received Tax Paid Cashflow From Operations Capex Disposals Of FAs/subsidiaries Acq. Of Subsidiaries/investments Other Investing Cashflow Cash Flow From Investing Debt Raised/(repaid) Proceeds From Issue Of Shares Shares Repurchased Dividends Paid Preferred Dividends Other Financing Cashflow Cash Flow From Financing Total Cash Generated Free Cashflow To Equity Free Cashflow To Firm Dec-13A 763.7 (4.0) 5.8 Dec-14F 817.2 (7.8) (92.1) Dec-15F 853.2 (8.0) 11.4 Dec-16F 884.2 (8.4) 16.6 (349.4) 359.7 (27.4) (78.1) 670.3 (500.1) (44.1) 0.0 12.4 (531.8) 119.7 0.0 0.0 (137.8) (367.0) 382.7 (40.4) (56.9) 635.6 (430.0) 0.0 0.0 0.0 (430.0) 0.0 0.0 0.0 (163.4) (375.9) 392.0 (40.4) (94.5) 737.7 (400.0) 0.0 0.0 0.0 (400.0) 0.0 0.0 0.0 (167.6) (379.6) 396.3 (40.4) (100.2) 768.5 (350.0) 80.0 0.0 0.0 (270.0) 0.0 0.0 0.0 (178.0) 7.2 (10.9) 127.6 258.2 165.9 0.0 (163.4) 42.1 205.6 246.0 0.0 (167.6) 170.1 337.7 378.1 0.0 (178.0) 320.6 498.5 538.9 Revenue Growth Operating EBITDA Growth Operating EBITDA Margin Net Cash Per Share (S$) BVPS (S$) Gross Interest Cover Effective Tax Rate Net Dividend Payout Ratio Accounts Receivables Days Inventory Days Accounts Payables Days ROIC (%) ROCE (%) 45.0 Avg fare/trip (%chg,main prod/serv) Ridership grth (%,main prod/serv) Avg fare/trip (%chg,2ndary prod/serv) Ridership grth (%,2ndary prod/serv) 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 Jan-11 Jan-12 Dec-13A 5.71% 3.86% 20.4% 0.01 1.03 15.56 21.0% 56.5% 11.68 8.83 89.73 10.9% 11.0% Dec-14F 4.33% 7.00% 20.9% 0.03 1.09 11.76 21.0% 56.5% 10.67 9.88 83.11 11.8% 11.5% Dec-15F 2.93% 4.40% 21.2% 0.11 1.16 12.42 21.0% 56.5% 10.79 10.28 77.07 12.0% 11.6% Dec-16F 4.13% 3.63% 21.1% 0.27 1.22 13.08 21.0% 56.5% 10.76 10.26 76.97 12.5% 11.6% Dec-13A N/A 8.2% N/A 7.5% Dec-14F N/A 5.0% N/A 13.0% Dec-15F N/A 3.0% N/A 4.0% Dec-16F N/A 5.0% N/A 8.0% Key Drivers 12-month Forward Rolling FD P/E (x) 50.0 0.0 Jan-10 Dec-13A 831 334 71 5 1,240 2,777 71 687 310 3,845 218 Jan-13 Jan-14 BTS Group ComfortDelGro Express Transindo Utama SMRT Corporation 4 ComfortDelGro│Singapore November 13, 2014 #01 DISCLAIMER This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. 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The views and opinions in this research report are our own as of the date hereof and are subject to change. If the Financial Services and Markets Act of the United Kingdom or the rules of the Financial Conduct Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. CIMBS has no obligation to update its opinion or the information in this research report. This publication is strictly confidential and is for private circulation only to clients of CIMBS. This publication is being supplied to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of CIMBS. CIMB Securities (Thailand) Co., Ltd. may act or acts as Market Maker and issuer including offering of Derivative Warrants Underlying securities of the following securities. Investors should carefully read and study the details of the derivative warrants in the prospectus before making investment decisions. AAV, ADVANC, AMATA, ANAN, AOT, AP, ASP, BANPU, BAY, BBL, BCH, BCP, BEC, BECL, BGH, BH, BIGC, BJC, BJCHI, BLA, BLAND, BMCL, BTS, CENTEL, CK, CPALL, CPF, CPN, DCC, DELTA, DEMCO, DTAC, EARTH, EGCO, ERW, ESSO, GFPT, GLOBAL, GLOW, GUNKUL, HEMRAJ, HMPRO, INTUCH, IRPC, ITD, IVL, JAS, KBANK, KCE, KKP, KTB, KTC, LH, LOXLEY, LPN, M, MAJOR, MC, MCOT, MEGA, MINT, NOK, NYT, PS, PSL, PTT, PTTEP, PTTGC, QH, RATCH, ROBINS, RS, SAMART, SCB, SCC, SCCC, SIRI, SPALI, SPCG, SRICHA, STA, STEC, STPI, SVI, TASCO, TCAP, TFD, THAI, THCOM, THRE, THREL, TICON, TISCO, TMB, TOP, TPIPL, TTA, TTCL, TTW, TUF, UMI, UV, VGI, TRUE, WHA. Corporate Governance Report: The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the Market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may be changed after that date. CIMBS does not confirm nor certify the accuracy of such survey result. Score Range: Description: 90 - 100 Excellent 80 - 89 Very Good 70 - 79 Good Below 70 or N/A No Survey Result United Arab Emirates: The distributor of this report has not been approved or licensed by the UAE Central Bank or any other relevant licensing authorities or governmental agencies in the United Arab Emirates. This report is strictly private and confidential and has not been reviewed by, deposited or registered with UAE Central Bank or any other licensing authority or governmental agencies in the United Arab Emirates. This report is being issued outside the United Arab Emirates to a limited number of institutional investors and must not be provided to any person other than 7 ComfortDelGro│Singapore November 13, 2014 the original recipient and may not be reproduced or used for any other purpose. Further, the information contained in this report is not intended to lead to the sale of investments under any subscription agreement or the conclusion of any other contract of whatsoever nature within the territory of the United Arab Emirates. United Kingdom and Europe: In the United Kingdom and European Economic Area, this report is being disseminated by CIMB Securities (UK) Limited (“CIMB UK”). CIMB UK is authorised and regulated by the Financial Conduct Authority and its registered office is at 27 Knightsbridge, London, SW1X 7YB. 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United States: This research report is distributed in the United States of America by CIMB Securities (USA) Inc, a U.S.-registered broker-dealer and a related company of CIMB Research Pte Ltd, CIMB Investment Bank Berhad, PT CIMB Securities Indonesia, CIMB Securities (Thailand) Co. Ltd, CIMB Securities Limited, CIMB Securities (Australia) Limited, CIMB Securities (India) Private Limited, and is distributed solely to persons who qualify as "U.S. Institutional Investors" as defined in Rule 15a-6 under the Securities and Exchange Act of 1934. This communication is only for Institutional Investors whose ordinary business activities involve investing in shares, bonds and associated securities and/or derivative securities and who have professional experience in such investments. Any person who is not a U.S. Institutional Investor or Major Institutional Investor must not rely on this communication. The delivery of this research report to any person in the United States of America is not a recommendation to effect any transactions in the securities discussed herein, or an endorsement of any opinion expressed herein. CIMB Securities (USA) Inc, is a FINRA/SIPC member and takes responsibility for the content of this report. For further information or to place an order in any of the above-mentioned securities please contact a registered representative of CIMB Securities (USA) Inc. Other jurisdictions: In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is only for distribution to professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions. Distribution of stock ratings and investment banking clients for quarter ended on 30 September 2014 1552 companies under coverage for quarter ended on 30 September 2014 Rating Distribution (%) Add 54.9% Hold 29.5% Reduce 15.6% Investment Banking clients (%) 5.0% 2.3% 1.0% Spitzer Chart for stock being researched ( 2 year data ) ComfortDelGro (CD SP) Price Close 2.40 2.88 2.38 2.59 2.22 2.18 2.18 Recommendations & Target Price 1.94 2.60 1.76 2.80 2.20 2.00 1.80 1.60 Add 1.40 Nov-12 Outperform Mar-13 Hold Neutral Jul-13 Reduce Underperform Nov-13 CustomSpitzerKR_KRSpitzer 8 Trading Buy Mar-14 Trading sell Jul-14 Not Rated ComfortDelGro│Singapore November 13, 2014 Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (Thai IOD) in 2014. AAV – Very Good, ADVANC – Very Good, AEONTS – not available, AMATA - Good, ANAN – Very Good, AOT – Very Good, AP - Good, ASK – Very Good, ASP – Very Good, BANPU – Very Good , BAY – Very Good , BBL – Very Good, BCH – not available, BCP - Excellent, BEAUTY – Good, BEC - Good, BECL – Very Good, BGH - not available, BH - Good, BIGC - Very Good, BJC – Good, BLA – Very Good, BMCL - Very Good, BTS - Excellent, CCET – Good, CENTEL – Very Good, CHG – not available, CK – Very Good, CPALL – not available, CPF – Very Good, CPN - Excellent, DELTA - Very Good, DEMCO – Good, DTAC – Very Good, EA - Good, ECL – not available, EGCO - Excellent, GFPT - Very Good, GLOBAL - Good, GLOW - Good, GRAMMY - Excellent, HANA Excellent, HEMRAJ – Very Good, HMPRO - Very Good, ICHI - not available, INTUCH - Excellent, ITD – Good, IVL - Excellent, JAS – not available, JUBILE – not available, KAMART – not available, KBANK - Excellent, KCE - Very Good, KGI – Good, KKP – Excellent, KTB - Excellent, KTC – Good, LH - Very Good, LPN – Very Good, M - not available, MAJOR - Good, MAKRO – Good, MBKET – Good, MC – Very Good, MCOT – Very Good, MEGA – Good, MINT Excellent, OFM – Very Good, OISHI – Good, PS – Very Good, PSL - Excellent, PTT - Excellent, PTTEP - Excellent, PTTGC - Excellent, QH – Very Good, RATCH – Very Good, ROBINS – Very Good, RS – Very Good, SAMART - Excellent, SAPPE - not available, SAT – Excellent, SAWAD – not available, SC – Excellent, SCB - Excellent, SCBLIF – Good, SCC – Very Good, SCCC - Good, SIM - Excellent, SIRI - Good, SPALI - Excellent, STA – Very Good, STEC - Good, SVI – Very Good, TASCO – Good, TCAP – Very Good, THAI – Very Good, THANI – Very Good, THCOM – Very Good, THRE – not available, THREL – Good, TICON – Good, TISCO - Excellent, TK – Very Good, TMB - Excellent, TOP - Excellent, TRUE – Very Good, TTW – Very Good, TUF - Good, VGI – Very Good, WORK – not available. CIMB Recommendation Framework Stock Ratings Definition: Add The stock’s total return is expected to exceed 10% over the next 12 months. Hold The stock’s total return is expected to be between 0% and positive 10% over the next 12 months. Reduce The stock’s total return is expected to fall below 0% or more over the next 12 months. The total expected return of a stock is defined as the sum of the: (i) percentage difference between the target price and the current price and (ii) the forward net dividend yields of the stock. Stock price targets have an investment horizon of 12 months. Sector Ratings Overweight Neutral Underweight Definition: An Overweight rating means stocks in the sector have, on a market cap-weighted basis, a positive absolute recommendation. A Neutral rating means stocks in the sector have, on a market cap-weighted basis, a neutral absolute recommendation. An Underweight rating means stocks in the sector have, on a market cap-weighted basis, a negative absolute recommendation. Country Ratings Overweight Neutral Underweight Definition: An Overweight rating means investors should be positioned with an above-market weight in this country relative to benchmark. A Neutral rating means investors should be positioned with a neutral weight in this country relative to benchmark. An Underweight rating means investors should be positioned with a below-market weight in this country relative to benchmark. *Prior to December 2013 CIMB recommendation framework for stocks listed on the Singapore Stock Exchange, Bursa Malaysia, Stock Exchange of Thailand, Jakarta Stock Exchange, Australian Securities Exchange, Taiwan Stock Exchange and National Stock Exchange of India/Bombay Stock Exchange were based on a stock’s total return relative to the relevant benchmarks total return. Outperform: expected to exceed by 5% or more over the next 12 months. Neutral: expected to be within +/-5% over the next 12 months. Underperform: expected to be below by 5% or more over the next 12 months. Trading Buy: expected to exceed by 3% or more over the next 3 months. Trading Sell: expected to be below by 3% or more over the next 3 months. For stocks listed on Korea Exchange, Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Outperform: Expected positive total returns of 10% or more over the next 12 months. Neutral: Expected total returns of between -10% and +10% over the next 12 months. Underperform: Expected negative total returns of 10% or more over the next 12 months. Trading Buy: Expected positive total returns of 10% or more over the next 3 months. Trading Sell: Expected negative total returns of 10% or more over the next 3 months. 9